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Banks DIH still seeking tax write-off similar to what was granted to DDL by GRA
Kaieteur News – Leading player in the manufacturing industry in Guyana, Banks DIH Limited is still engaging the High Court’s attention, seeking tax write-offs that the company believes it is entitled to – similar to what was granted to its competitor – the Demerara Distillers Limited (DDL).
The case was filed in April 2016 against the Guyana Revenue Authority (GRA). Banks DIH in its recently published annual report stated that the proceedings are pending in the High Court of the Supreme Court of Judicature. According to the Board of Directors Report on April 1, 2016, GRA consented to a substantial tax write-off for a local manufacturing company (DDL).
Acting on legal advice, Banks had written to GRA claiming that it was entitled under Article 149D of the Constitution to be treated equally by the state as it treated the local manufacturing company’s liability. However, GRA did not respond favourably. Banks DIH said that as a result, acting on legal advice, it caused to be filed in the High Court of Guyana, legal proceedings against the GRA and the Attorney General of Guyana.
The beverage giant is asking for “…a declaration that Banks DIH Limited is entitled under Article 149D of the Constitution to have the Guyana Revenue Authority treat its liability for Consumption Tax for the years 2001-2006 and its liability to Excuse Tax for the years 2007-2016 equally or materially in similar manner as the Guyana Revenue Authority treated a local manufacturing company’s liability for the same taxes during the same periods as embodied in the Consent Order dated 1st April, 2016.”
In April 2016, DDL announced that an amicable settlement had been reached with the GRA to resolve a longstanding dispute over Consumption Tax that began since in 2002. The settlement followed an extended legal battle between DDL and GRA arising out of the Consumption Tax assessment levied against the company by then Commissioner-General Khurshid Sattaur in January 2009, in the sum of $5,392,020,753.
This assessment was immediately challenged in the High Court by DDL, through its lawyers, Miles Fitzpatrick, S.C. and Timothy Jonas. According to reports, DDL and GRA were able to recommence negotiations for a resolution of the methodology for a calculation of Consumption Tax (and its successor, Excise Tax). A deal was reached for DDL to settle for $1.5 billion.
In 2002, DDL had disclosed, it had raised a legal challenge against the GRA on the methodology adopted by the latter for the assessment of Consumption Tax. In February 2005, the High Court ruled in favour of DDL. The GRA subsequently appealed that decision, and on July 31, 2008, the Guyana Court of Appeal unanimously dismissed GRA’s appeal.
Following the dismissal of the appeal, the GRA commenced a new assessment in August 2008 and, notwithstanding attempts by the parties at resolving the matter, on January 16, 2009, GRA then issued a new claim in the amount of $5.392 billion.
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